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  • 1
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    Inventives for private sectory participation in the article 6.4 mechanism : discussion paper (2020)
    Berlin : German Emissions Trading Authority (DEHSt)
    Details
    Publication Date: 2022-02-18
    Description: Article 6.4 of the Paris Agreement explicitly acknowledges the need to incentivize and facilitate the participation of private entities in the mitigation of greenhouse gas emissions. Under the Clean Development Mechanism (CDM), private sector actors had already the opportunity to participate in a new and fast-growing market. However, they faced numerous challenging investment barriers. The study provides an overview on key factors and barriers determining private sector participation in Article 6 mechanisms. It distinguishes between the three topics demand side factors, rules and standards for market mechanisms, and supply side factors and provides for each of them options to mitigate or overcome barriers. In a short analysis, it further explores three of the identified options: - Improving the design and support of national systems and capacities is an important pre-requisite for the private sector to be able to generate and sell ITMOs - The up-scaling of mitigation activities e. g. through (sub-) sector level crediting, and policy crediting helps private sector actors to benefit from economies of scale - Exploring the potential of digitization of measuring, reporting and verification (MRV), e. g. the use of sensors, internet of things, artificial intelligence and blockchain to make the project cycle more efficient and reduce transaction costs. Overall, the report stresses the importance of host country readiness to provide the private sector with a robust and trusted environment that allows for the adoption of Article 6 mechanisms.
    Keywords: ddc:320
    Repository Name: Wuppertal Institut für Klima, Umwelt, Energie
    Language: English
    Type: workingpaper , doc-type:workingPaper
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  • 2
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    Options for fostering a net-zero GHG emission world under the Paris article 6.4 mechanism : discussion paper (2020)
    Berlin : German Emissions Trading Authority (DEHSt)
    Details
    Publication Date: 2022-02-18
    Description: The new mechanism defined under Article 6.4 of the Paris Agreement is supposed to allow for international cooperation with regard to climate change mitigation and thereby enable an increase in overall mitigation. Nevertheless, the design of the mechanism under Article 6.4 should also make sure that it is not be in conflict with the long-term goal of net-zero GHG emissions but even better foster national pathways leading to this objective. Building this into the mechanism requires to shift the focus from short- and mid-term considerations to the long-term perspective in one way or another. This discussion paper explores three different approaches that may help to foster the long-term objective of net-zero GHG emissions in the operationalization of Article 6.4, namely positive and negative lists, additionality with regard to a baseline consistent with both, NDCs and long-term targets, as well as adaptation of existing instruments and criteria from climate finance. The detailed discussion of the ap-proaches shows that the approaches should not be seen as mutually exclusive but rather as comple-mentary to each other. From the analyses, two storylines emerge how to combine aspects of the differ-ent approaches in a reasonable way to foster the long-term objective of net-zero GHG emissions under Article 6.4.
    Keywords: ddc:320
    Repository Name: Wuppertal Institut für Klima, Umwelt, Energie
    Language: English
    Type: workingpaper , doc-type:workingPaper
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  • 3
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    Options for fostering increasing ambition levels under the Paris Article 6.4 mechanism : discussion paper (2019)
    Berlin : German Emissions Trading Authority (DEHSt)
    Details
    Publication Date: 2022-02-18
    Description: Article 6 of the Paris Agreement establishes mechanisms for Parties to "pursue voluntary cooperation in the implementation of their nationally determined contributions to allow for higher ambition in their mitigation and adaptation actions [...]" (Article 6.1). I. e. the mechanisms are explicitly designed to foster higher ambition. However, without additional guidance and rules, the economic incentives of carbon markets may work against increasing host country ambition. For example, setting ambitious NDC targets may directly reduce the amount of mitigation outcomes that go beyond the NDC target and that a host country can transfer abroad. The report presents four options on how the risks can be ad-dressed and ambition can be increased: (1) Strengthening reporting, transparency and comparability; (2) Reconciling the design of the Article 6.4 mechanism with ambition raising of host countries; (3) Supporting the host country to raise ambition through the Article 6.4 mechanism; (4) Fostering the acquiring country to raise ambition through the Article 6.4 mechanism. These options are assessed and recommendations are provided on how they could be implemented.
    Keywords: ddc:320
    Repository Name: Wuppertal Institut für Klima, Umwelt, Energie
    Language: English
    Type: workingpaper , doc-type:workingPaper
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  • 4
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    Achieving overall mitigation of global emissions under the Paris article 6.4 mechanism : discussion paper (2019)
    Berlin : German Emissions Trading Authority (DEHSt)
    Details
    Publication Date: 2022-02-18
    Description: Article 6.4 of the Paris Agreement establishes a new mechanism for Parties to cooperate in achieving their nationally determined contributions (NDCs). One key innovation of the Article 6.4 mechanism is its objective to "deliver an overall mitigation in global emissions" (Art. 6.4(d)). This report develops recommendations on how to implement this objective. A key difficulty lies in the fact that even basics of how the mechanism is supposed to function have so far not been clarified by the Parties. The report therefore first sketches out what has so far been agreed and discussed on the mechanism’s activity cycle. Second, as the concept of overall mitigation has so far also not been clearly defined by Parties, the report derives a working definition from the language that was agreed in the Paris Agreement. In the next step, the report provides a survey of the options to achieve overall mitigation that have so far been discussed in the relevant literature and in the Article 6 negotiations. Many of these options were developed in the context of the Kyoto mechanisms. The report therefore discusses to what extent the options are also applicable under the Paris Agreement or whether adjustments need to be made. In the following, the options that are applicable under the Agreement are assessed on the basis of a number of criteria. The report concludes with a summary of the main findings and recommendations.
    Keywords: ddc:320
    Repository Name: Wuppertal Institut für Klima, Umwelt, Energie
    Language: English
    Type: workingpaper , doc-type:workingPaper
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  • 5
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    The voluntary carbon market : what may be its future role and potential contributions to ambition raising? ; Discussion paper (2019)
    Berlin : German Emissions Trading Authority (DEHSt)
    Details
    Publication Date: 2022-02-18
    Description: This report explores the future role of the voluntary carbon market and its potential to contribute to raising the ambition of climate policy. For this purpose, desk research was complemented by interviews with voluntary carbon market representatives. The report finds that the current roles of the voluntary market are set to change fundamentally due to the Paris Agreement. For the future of the voluntary market as an investor, three roles were identified, each of which is associated with specific challenges: The market may maintain its current role of buyer of carbon neutrality credits, it may become a supporter of NDC implementation, or it may become a driver of ambition. With regard to the future role of private certification standards, the Paris Agreement may hold the possibility of using such standards in the context of compliance activities. Overall, the findings indicate that the voluntary market has some potential to contribute to ambition raising. Whether this potential will actually be unlocked depends on how the concept of ambition raising will be operationalized under the Paris Agreement and to what degree it can be integrated into the voluntary market's activities and business models.
    Keywords: ddc:320
    Repository Name: Wuppertal Institut für Klima, Umwelt, Energie
    Language: English
    Type: workingpaper , doc-type:workingPaper
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